CNN speaks with Fareed about the ongoing stalemate in Washington, the impact on America’s standing abroad and why investors are worried about the United States.

Is there something wrong with our system that this is happening again, three years of this budget stalemating?

It's a good question, because, let's be honest – the American system is designed to allow for easy gridlock. The Founding Fathers created a system fearing English tyranny, fearing an English king, so there are lots of different ways to veto stuff. There are lots of checks and balances. So, I think that's part of the issue. But really, what's at work here is something much more dangerous, which is here we're getting into an anti-democratic process, which is not the way the system was meant to work.

Look, if you want to repeal Obamacare and you're the Republican Party, you're the Tea Party, great. Go for it. If you want to get rid of entitlements, you want to cut government spending, that's great. There is a procedure. You pass a bill in the House, it passes in the Senate and the president signs it.

What's happening here is because the Tea Party does not have that ability, does not have a majority in the House or the Senate, and certainly the president wouldn't sign it. So what it's trying to do is really extortion, which is to say, we will block everything if you don't give us this, which we know we couldn't get passed through the democratic process, normally. That seems to me something quite new.

And so, when the number one near-term and long- term concern in this country should be about jobs, a new Gallup Poll is showing for the first time ever, it's dysfunctional government that is the most important problem we face. Things have really changed here. It's our own government that Americans are most worried about.

I was talking to an investor who worried about political risk. That's what investors talk about when they worry about places like Indonesia or banana republics or some African country. And he was saying to me, what we have now realized is the place we need to worry about political risk is the United States of America…It's not all the third world countries with creaky dictators.

President Obama won the election, and it was the makers and takers argument on the right. It's come back around and now it's wagon pullers and wagon riders. Is that it – at the core of this budget debate here, that too many people are getting too much from government and not enough people are pulling their weight?

You know, it is at the core, and it's part of the problem. By which I mean to say, if you feel that way, craft legislation that gets people off Medicaid, Medicare, Social Security. Get it passed. You know, that's the democratic way you deal with this. You don't do it by extortion, by holding up the legitimate functions of paying our bills.

But there's a broader issue here…I don't understand how burning down the house helps you make that case.

And it's incredibly counterproductive to shut down the government, to be fighting internally. You look at this picture of world leaders in Indonesia at the APEC summit. There is somebody missing there, and it's the president of the United States. It’s counterproductive to be fighting like this at home, fighting against ourselves at home when there is so much work to do around the world.

Well, it's a huge opportunity cost. In Asia, remember, the president had pushed kind of a pivot to Asia, because he felt this is where America's economic future is. It's the fastest growing part of the world. And it was a very successful move. It was a way of countering Chinese influence.

Well, guess what's happened? Because the president can't be there, the Chinese sent both their president and their prime minister. They went out there [with] inducements of aid. So they're making hay while we're away. It's very, very unfortunate.

A lot has been made about the Tea Party…some would say intransigence and changing the script from Obamacare now to balancing the budget. Should the president be showing a different kind of leadership, a better kind of leadership?

I don't believe so. I think what it's meant to say is it's a plague on both your houses on one hand. On the other hand, this is not one of those cases. The president is standing firm on, I think, a core constitutional and democratic principle, which is precisely what we have been talking about. Part of a democracy is if there is a process in place that is democratic and constitutional, you accept the outcome. You know, whether it's your guy who won or the other guy, you accept that. If it's the legislation you like or you didn't like, you accept it.

That core principle is at the heart of our democracy. If the process worked, Obamacare was passed by the House, by the Senate, signed by the president, affirmed by the Supreme Court, the Congress passed a budget the same way. You have to live with that. And if you want to change it, change it using the same process. Don't take hostages.

soundoff(53 Responses)

Timmy Suckle

I kissed my way up to VP at a health insurance company. Now I take over $600,000 of your health care dollars for NO VALUE ADDED to your health care. And that’s just me. Now think about how many other VPs, Directors, Managers, etc. are at my company alone. Now multiply that by thousands of others at hundreds of other health insurance companies. From 10 to 25% of your health care dollars go towards administration that adds NO VALUE to your health care. But my company’s PAC dollars will continue to fool you little people into thinking that a single payer system will be bad. Little people like you are so easy to fool. Little people also don’t realize that a single payer system is the ONLY system that would allow little people (as an entire country) to negotiate better health care prices. Little people don’t realize that the Medical Cartels already know that. And that is the reason why the Medical Cartels spend so much PAC money from the hospitals and doctors lobbying against a single payer system. Some little people say that a single payer system would cost you little people more. But if that were true, then wouldn’t the hospitals and doctors WANT that extra money? Yes they would. So why do the Medical Cartels lobby against a single payer system? It’s because the Medical Cartels know it would allow little people to negotiate better health care prices. And that’s what the Medical Cartels are afraid of. Period.
But us big wigs at insurance companies, hospitals, and pharmacy companies don’t ever need to worry about health care no matter what it costs. We get our health care paid for one way or another by you little people. And we get the little people that work at our companies to contribute to our PACs. And us big wigs say it’s to protect the little peoples’ jobs. But in reality it would be in the little peoples’ best interest to NOT contribute to the PAC. Again, little people are so easily fooled. I won’t ever have to worry about losing my job with so many little people being brain washed by the Medical Cartels’ PAC money. Not only that, the Medical Cartels’ PAC money is used to elect so many republicans that will never allow a single payer system. Republicans have always fought against any meaningful health care reform. But that’s what our Medical Cartels’ PACs pay them for. Politicians can be bought so easily.
Pretty soon the only people that will be able to afford health care is us big wigs. And that’s the way it should be. We don’t want you little people using up the resources when we need them. And once again, I thank you little people for capping my SS tax at the $113,700 level. Now I only pay 1.2% SS tax and you little people pay 6.2%. Also, thank you for extending my tax breaks. I’m using the extra money on my vacation houses.

If Timmy Suckle was a real "VP", then he'd know that major corporations and PACs generally contribute to BOTH parties. After all, if you have the money, better hedge your bets and buy influence no matter who wins.

And as far as bureaucrats that add no value to the customer ... how many bureaucrats are there in the Federal Government? Do they "add value"?

It's funny how "progressives" with an agenda feel the need to lie and obfuscate to make any point. Sad, really.

October 16, 2013 at 12:09 am |

All True

Oracle – Just replace Timmy Suckle with ANY executive at ANY health insurance company and then it's ALL true!!! You're just bitter because it IS true.

I love the single payer system. I wish they do the same thing to auto insurance. I collected few tickets in past few years and my premium is way too high. I am sure a single payer government run insurance will help me and many millions like me.

The only thing I realty doubt about what you said is that you are a VP at a major corporation. Just looking at the way you present yourself makes me think you make maybe $25K, $30K at the most per year. No major corporation could be fooled by somebody who presents themselves the way you do. It's not easy being a big shot, and you can't even act the part when nobody knows the real you. Nice try at acting the big shot though...you got your 15 minutes of fame now it's time to go back to flipping burgers.

Its true with healthcare, or any insurance company, the have huge dollars flowing into the pool, and when they go broke, oh well... the reward in the past have far exceeded the risks once a company can establish itself, That isn't a very practical approach to peoples health care. I would also add that the insurance industry has made even having healthcare costly for those with insurance. The ACA will be changing the fundamentals in a way where the people get more for their money. We live in a free market society, but that shouldn't mandate that everything is subject to a capitalistic pyramid scheme.... or does it

October 15, 2013 at 11:39 pm |

Flagrant

Hey, I think you have a good point there, Timmy Suckle. Those VPs and CEOs take a big cut off the top. I cannot afford insurance. I am just a little bottom feeder. You are living in lower taxation and high on the hog. Congratulations to being part of the problem and not solution.

David, I'm not an English literature expert. You seem to be a good detective but you don't want to miss the forest for the trees. Timmy Suckle is a pseudonym. The piece he's written is satirical apologetcs, kind of in the style of C.S. Lewis's Screwtape Letters. I look forward to hearing more from Timmy.

1.2% of a upper income is significantly HIGHER than 6% of a middle income earner... in my opinion the whole idea of using a Percentage base Tax system doesn't reflect the actual costs of service. I don't use anymore services than the poor,, in fact I probably use far less, so why do I pay in real dollars so much more then they do.

I think you misunderstood the 1.2% and 6%. A person that makes $600,000 doesn't pay SS on the entire $600,000. They pay only on $113,700 (the cap). Therefore, a person that makes $600,000 pays 1.2% of income while anyone making less than $113,700 pays the entire 6% of their income. Get it? Probably not.

October 16, 2013 at 10:47 am |

dmf

The Congress is completely sold to special interest lobbyists . Almost the entire U. S. ploiticla system gears to big corporations and business. There is complete disregard to public interests , national well being of poor , needy ,d the declining middle class fast inlast six years and future of these United States . Who and how voters would ever reverse the balance of power , and exisitng system working against them ? The two major politicla parties would never commit sucide and a third politicla party as force would never be in Congress !

DEMOCRACY ?????? What democracy ? There is no democracy because not only the government but also the media are dysfunctional and in the pockets of the Big Money Trust. What is going on is a circus , a smoke screen while the public assets are being looted to pay for endless wars, for failed banks and the criminals instead of going to jail are being rewarded. It is going on in the US, UK , EU where public assets are privatized and sold off to the highest bidder. Bush tried it with the Post Office but it is still standing ,while Cameron in the UK succeeded in undervaluing their Royal Mail so he can sell it off to his friends for pennies on the dollar and the British public will be stuck with the pensions.

Careful guys. The spirit of patriotism and democracy, for all intents and purposes, may be dead in WASHINGTON, but certainly not in AMERICA. Let's be clear on that, and keep on working to awaken a sleeping giant.

October 14, 2013 at 11:36 am |

deep blue

Have you considered the possibility that we the people are still in charge, and we the people are just idiots?

We the people have not been in charge for a long time, deep blue, that is why we are bankrupt from endless wars. The money spent on wars could have provided free healthcare for all in the US. The corporations and special interest groups rule, not we the people.

October 14, 2013 at 2:29 pm |

Dean

rightospeak

We the people have not been in charge for a long time, deep blue, that is why we are bankrupt from endless wars. The money spent on wars could have provided free healthcare for all in the US. The corporations and special interest groups rule, not we the people

righttospeak – the people are in charge. They just keep electing stupid crooks to represent them.

October 15, 2013 at 4:07 pm |

Michael Molnar

II really fear that this is the downfall of America. We urgently need to fix gerrymandering before it fixes us. We also must do something about the education of the electorate. A democracy works only with enlightened voters who understand intellectual honesty. Critical thinking should be in the core curriculum.

The amount of critical thinking in the core curriculum has increased drastically over the past half century. Critical thinking skills and the education of the electorate isn't the problem, or if it is, that aspect of the problem cannot be feasibly solved in the near future.

When the Dems did this 15 times it was called statesmanship. They were elected by people who wanted something fixed and they shut down the government repeatedly to get what they wanted. This situation is no different, other than the fact that the Dems don't want to negotiate to fix any of the bad laws they passed to get themselves voted out of the House control.

You are just repeating a GOP talking point without (I am giving you the benefit of the doubt) understanding it. In the past the Democrats have shut down the government in disputes over the passage of a budget. The Democrats never tried to shut down the government to get rid of a law (Affordable Care Act) that was already passed and funded. And, in fact, the shutdown has not kept the ACA exchanges from opening and signing people up for insurance. The GOP tried 43 times to repeal or defund the ACA and failed every time. Now they are holding the US government hostage to attempt to do what they were unable to do through the democratic process. I think all GOP members of the House of Representatives are in violation of their oath of office. They should be dismissed immediately and sent home.

And I don't believe you're looking at the bigger situation in Congress. You mention the budget... why is it they keep demanding a "clean CR?" It's because we haven't had an actual budget for about half a decade. Senator Reid has consistently blocked any actually budgets from reaching the Senate floor since the Republicans took the House in 2010. The Democrats would rather pass wasteful Continuing Resolutions, maintaining the earlier "Democrat-approved" spending levels, than have any debate over the budget. The one time the Obama administration deigned to submit a budget, as his predecessors have historically done every year, it was defeated 99-0 in the Senate.

The Democrats have themselves used the power to control parliamentary procedure to stifle any possibility of negotiation for years now. That the House Republicans are now using it, is simply returning like for like.

October 14, 2013 at 8:48 pm |

fred champy

i think otherwise,i might be wrong or i might be right,although way too many people seem to think on the same line.
Whether republicans won the chamber of congress or not made a difference in the shutdown?They won the chamber
democratically?Whether Obama won the election or not by a bigger margin would we had a shutdown?If he won the chamber of congress?It seems no!It this all democracy yup!Where is extortion in that?dunno!

I disagree that this is something new. Examples: the president didn’t like DOMA (law of the land) and acted outside of “the process” in telling the DOJ to just stop upholding it. Also, the ACA now being implemented is not the law that was passed and signed. Obama has acted outside of the process to grant hundreds of waivers to political buddies, while denying them to ordinary citizens.

Further, we don’t have a democracy; we have a representative republic. When Obama says “elections have consequences,” he means that his does. Well, so does everyone else’s, and it’s his job as president to negotiate and find consensus. I would argue that his telling Republicans that he will negotiate as soon as they give him everything he want is what has brought us to this pass. Not that the Republicans haven’t played this horribly … they did … but Obama and Reid are just as guilty of holding hostages as they are.

As I watch CNN I am just amazed that no one seems to ask the basic questions : 1. How is our national debt going to be paid and when ? Kicking the can down the road like they are doing in Greece and selling off national treasures including Greek islands has not paid the debt ,just enraged the population. Are we going to sell off Alaska and Hawaii to our banker the Communist Chinese ?
2 .When are we going to stop endless wars that are draining our country ? 3. When are we going to bring back off shored jobs to improve our economy ? Simple questions .

As I look at these comments (and others that follow other opinion pieces) I get a feel for how difficult it must be to get consensus among a bunch of people who's job (and all the benefits, ethical and less than ethical, that go with it). Imagine trying to take the people who have written comments here and get them all to agree on what needs to be done. First, there is no respect in most of the comments and responses. Without respect there can be no trust. Without trust there can be no agreement. That is how it appears to be in our current government. In all my years I have never seen this much lack of respect (party for party, citizen for President, even Republican for Republican – if the Tea Party is truly part of the Republican Party rather than a party unto itself). Since we cannot expect respect to be given or earned in a few days, we cannot expect an agreement in the countries best interest any time soon. What we can expect is some kind of Band-Aid to prevent the worst of all evils and another event like this in a relatively short period of time. Look for America to begin to solve its problems when you see respect return to our society. If you win, respect your colleague for standing up for his/her beliefs and work with them to understand their position. If you lose, respect your colleague for making the better case to the people and work with them to understand their position. Then use the system (with that respect) to change the things you still do not agree with. Win or lose you will gain and give respect and things will work out the way they are supposed to. I just feel better putting that out there.

Zakaria needs to grow up. Hard ball has been the hand maiden of American politics since the beginning of our history. Teddy Roosevelt, threatened with a loss of funds to pay for the round the world tour of America's "Great White Fleet", knew he had the funds to get our fleet half way around the world and it was up to Congress to pay to get it back. Extortion? - Obama ignores the opposition while passing the most poorly written and ill conceived legislation down their throats. Undemocratic bullying? The Tea Party is elected to bring some fiscal sense to the U.S. Government and uses the sequester and partial shutdown to force the dems to negotiate. Extortion? It is all politics and it is all hard ball.

you are totally right. Zakari does not have a clue about what America is or how it rose to greatness. Was his silly butt born here or is he just another interloper who has latched on to the success that ONLY can be found in a country like the U. S. (That is now practically devastated by leeches like Zakari). Zakari, other "foreigners" like him do not care about the demise of this wonderful country as long as they "get theirs". Free stuff huslers, welfare queens, middle class whites who hustles the food stamp system, greedy bankers, greedy congressmen, race hustlers, pimps. drug dealers, illegal persons, sleeper cell terrorist all have one thing in common: They want ot screw this country into destruction. Period.

Health Care is a sticky issue. After all this hostage taking procedure by the Republican Party and the big noise of of the Tea Party to shut down Obamacare, a picture keeps coming to my mind and that is of Cuba when Che Guevara was the Industry Minister and was pushing for free health care for all Cubans. But Che was a fighter more that a politician and he always dreamed of shutting down the USA empire. Well guess what? It is about to happened! What he tried to do in Bolivia with a rag-tag army now the Republicans are doing it with well dressed politicians that collectively make more money than all the Bolivians working together a full year. This is true irony....

Congress has become a spectator sport reminicent of; professional wrestling, truck pull, and roller derbies. The same people that watch those things are the people that put tea party members in congress.

Bring back outsourced jobs. Stop tax shelters in offshore islands. Do not continually import foreign labor to fill jobs here. Healthcare is something that we could all use. Personally, I would like to get a complete physical and mammogram; but I cannot.

The other issue is the term limit system. As it is, the President has no incentive to compromise simply because he'll get termed out anyway in three years. If he had an election coming up, he'd have more motivation to keep things running smoothly.

Of course, all the Tea Party nutjobs are abusing the checks and balances system due to the nation that's becoming more and more polarized.

Default is inevitable anyway . . . . who cares at this point . . . . the sooner the gravity of the national debt sinks in the better. It will be good to see a world that is not Amero-centric, we have not ever had any good reasons to interfere with force in any other countries affairs since and including Vietnam. So America has to eat a little humble pie . . . it is about time, and it will improve America and the world in the long run.

The Congress is completely sold to special interest lobbyists . Almost the entire U. S. ploiticla system gears to big corporations and business. There is complete disregard to public interests , national well being of poor , needy ,d the declining middle class fast inlast six years and future of these United States . Who and how voters would ever reverse the balance of power , and exisitng system working against them ? The two major politicla parties would never commit sucide and a third politicla party as force would never be in Congress !

It's not that easy! It's the economy! If USA imports from non-alliance countries (i.e. especially: China, S.Korea, ...), USA needs to pay for these imports. So if there are no balance exports, USA cannot balance these non-alliance trades, because these countries are in no alliance with the Western World. It gets even more dangerous, if USA for example has illegal military collaborations for example with S.Korea, but behind the scenes S.Korea plays it against NATO – then this is no nice result for USA. So, democracy is about legal rules, procedures and no irrational politics.

Do you know NOTHING about how dictators take control of countries?????

If you do NOT, then why do you write about world affairs?????

We absolutely have a dictator in America.........something we have not seen since Lincoln. It is time the media owns up to the reality........and stops trying to hide, what Obama really is, and what he really is doing. freedom in America is DEAD!

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The Global Public Square is where you can make sense of the world every day with insights and explanations from CNN's Fareed Zakaria, leading journalists at CNN, and other international thinkers. Join GPS editor Jason Miks and get informed about global issues, exposed to unique stories, and engaged with diverse and original perspectives.